Businesses failing to prepare despite no-deal Brexit fear

The vast majority of Irish businesses still do not have a Brexit plan in place, despite 70pc of firms expecting the UK’s departure from the EU to have a negative impact on Ireland’s economy.

AIB’s Brexit Sentiment index for the second quarter found that the manufacturing, retail and tourism sectors here were the most negative about Brexit.

Just 6pc of 500 businesses surveyed in the Republic of Ireland had a plan in place. In Northern Ireland, the figure was just 5pc.

The index found that larger businesses were more likely to have a plan, while the impact on the economy and potential tariffs were the main concerns for businesses in the Republic.

AIB’s head of business banking Catherine Moroney said it was “critical” for businesses to plan for the worst now.

“When businesses do seek financing, one of the key questions we in AIB ask them about is their Brexit-readiness and the potential impact Brexit may have on their business in a harder-line Brexit scenario,” she said.

Ms Moroney said the bank was launching a new credit-check service to help customers who were looking to increase their export reach.

Provided in association with Euler Hermes, the bank will allow customers a free risk assessment on five potential or existing overseas clients.

The idea is to provide greater peace of mind by gauging the likelihood that the overseas clients will pay their bills.

“Our local Brexit advisers are in place to support and assist businesses to navigate through Brexit and I encourage businesses to contact their local AIB to discuss how we can support their Brexit-readiness,” Ms Moroney said.

The bank also has a €122m allocation of funds as part of the Government’s Brexit loan scheme.

AIB found that in the Republic, food and drink businesses were most likely to have a plan in place (11pc), followed by tourism (9pc) and then transport (7pc).

AIB chief economist Oliver Mangan said the index’s readings in terms of sentiment had been fairly stable over recent surveys.

“This is reflective of the lack of any major new developments over the survey period in the Brexit process. While a somewhat limited proportion of SMEs are reporting a negative impact on business now, the lack of progress and clarity in relation to Brexit and the uncertainty is also evident in the survey results,” he said.

“Indeed, in the Republic of Ireland, the negative headline reading is being driven by concerns regarding the impact on business in the future and on the wider economic impact.”

Mr Raab will give a speech on Thursday setting out the UK government’s plans for a no-deal.

“Securing a deal is still by far the most likely outcome, but we want to make sure that we clearly set out the steps that people, businesses and public services need to take in the unlikely event that we don’t reach an agreement,” he said.

Britain will recognise some EU regulations in the event of a no-deal Brexit to ensure that the country does not grind to a halt, the ‘Telegraph’ reported over the weekend.

Government papers setting out what will happen if the UK leaves without a deal make clear that Britain will adopt a “flexible” approach to ensure that EU medicines, car parts and chemicals are still available in the UK.